Damages: Offside – a new test for penalty clauses

Paul Joukador and Nathan Searle report on a landmark Supreme Court judgment ‘Provided that the relevant contractual provision: (i) serves a legitimate business interest(s); and (ii) is not extravagant, exorbitant or unconscionable, it will not be a penalty and therefore will be enforceable.’ It is common practice to include a clause in a contract which …
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Landlord And Tenant Update: Penalty clauses

Nathan Searle and Kate Wilford explain the importance of watching out for potentially unenforceable penalty clauses and suggest some ways of tackling these issues. ‘There is no longer a clear dichotomy between unenforceable penalty clauses and enforceable liquidated damages clauses.’A penalty is a clause designed to deter a breach of contract, by providing for a …
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